Friday, May 24, 2013
GLOBAL DEPRESSION “Trigger Mechanism”: Collapse of Japanese Govt Bonds – 10-Year Now at 1%!!! Japanese BOND Market Closed – Nikkei DOWN over 1000 POINTS!!! Start of Reflation Bubble Bust?!?!
This is going to be huge!!!
Get ready to short Japanese equities and expect another real-estate bubble burst.
Christine Hughes, President and Chief Investment Strategist, discusses details of Japan’s radical monetary policy.
the key part of the video, for ease of viewing:
Last Updated: Thu, 23 May ’13 | 2:35 AM ET
Japan Bond Yields Spike – 10-Year Now at 1%
Japanese government bond (JGB) yields soared to 1 percent on
Thursday, their highest level in a year, prompting the Bank of Japan to
hold true to its promise of taking action to stabilize an incredibly
volatile bond market.
Analysts expected the market volatility to last for a while, but added that buying by domestic pension funds and the central bank should help keep a lid on yields.
Benchmark 10-year JGB yields jumped as high as 1.002 percent as debt markets globally sold off on comments from the Federal Reserve chief overnight that fueled worries about an early unwinding of the central bank’s asset-buying program….
JGB Futures plunge to two-year lows…
…
The Bank of Japan’s announcement Thursday of it’s aggressive monetary policy—with roughly 140 trillion yen, or $1.46 trillion, on the line by the end of 2014—is meant to send a signal, Bass told CNBC’s Squawk on the Street. “What [Prime Minister Shinzo] Abe and [new BOJ Gov. Haruhiko] Kuroda have done is formalized the announcement that the new sheriff is in town.”
Just got this very reliable financial intel.Analysts expected the market volatility to last for a while, but added that buying by domestic pension funds and the central bank should help keep a lid on yields.
Benchmark 10-year JGB yields jumped as high as 1.002 percent as debt markets globally sold off on comments from the Federal Reserve chief overnight that fueled worries about an early unwinding of the central bank’s asset-buying program….
- This will not end well for Japan: A mere rise in interest rates to 3% would consume Japan’s entire tax revenue just on interest on its national debt
- Nikkei Plunges 1,143 Points (7.32%); Global Equities Hammered; Start of Reflation Bubble Bust?
Japanese Bond Market Halted At Open As Bond Selling Purge Goes Global
Japanese government bonds (JGB) futures have been halted once again this evening as the market opens down over 1 point. 10Y yields smash 11.5bps higher to 1.00% and 5Y yields add 6bps to 47bps. These are quite simply unprecedented moves in what ‘was’ a safe asset class and impresses yet another VaR shock on the market (as we detailed here). What this means practically is that Japanese banks push further into insolvency land (as we explained here) today’s move wipes out another 1.5% of blended Tier 1 capital off the entire Japanese banking industry. Since the 10Y JGB yield lows of 32.5 bps on April 5, the move is rapidly approaching a full percentage point, or the parallel shift amount that the IMF warned would lead to 10% and 20% MTM losses for regional and major banks respectively. Today’s jump in 10Y yields continues the post-BoJ regime of greater-than-six-sigma moves…something no risk model can withstand for three weeks. Just a good job the BoJ didn’t have anything at all to say about this totally disorderly fiasco yesterday.JGB Futures plunge to two-year lows…
…
Japan markets plunge most since March 2011; Nikkei futures halted
Japan’s Topix index slides 7%, as financial companies plunge amid rising bond yields
Japan’s Topix index tumbled
almost 7%, the most since the aftermath of the March 2011 tsunami and
nuclear disaster, as financial companies plunged amid rising bond
yields. The rout triggered a halt in Nikkei 225 stock average futures
trading in Osaka.
Consumer lenders lost 11% to lead declines among the Topix’s 33 industries. Mitsubishi Estate Co., the country’s biggest developer, slid 9.3%. Mitsubishi Motor Corp. dropped 14%, falling a second day after advancing more than 50% in the previous three days. Tokyo Electric Power Co. plunged 13%.
The Topix lost 6.9% to close at 1,188.34 in Tokyo. Even with
Thursday’s decline, Japan’s broadest measure is still up almost 40% for
the year. Japan’s 10-year government bond yields touched 1% on Thursday
for the first time in a year after treasuries slid on speculation the
Federal Reserve will curb stimulus….
Bank of Japan Policy Is Huge, Risky Experiment: Fund Manager - 4 Apr 2013
Japan is wagering its future on a massive experiment by essentially doubling its monetary base, and Kyle Bass of Hayman Capital Management doesn’t see it ending well.The Bank of Japan’s announcement Thursday of it’s aggressive monetary policy—with roughly 140 trillion yen, or $1.46 trillion, on the line by the end of 2014—is meant to send a signal, Bass told CNBC’s Squawk on the Street. “What [Prime Minister Shinzo] Abe and [new BOJ Gov. Haruhiko] Kuroda have done is formalized the announcement that the new sheriff is in town.”
JAPAN: The Beginning of it’s Economic End – Get Ready To Short Japanese Equities And Expect Another Real-Estate Bubble Burst - May 22nd, 2013
Get ready to short Japanese equities and expect another real-estate bubble burst.
Christine Hughes, President and Chief Investment Strategist, discusses details of Japan’s radical monetary policy.
the key part of the video, for ease of viewing:
DOW FUTURES in the crapper!
DOW (MINI)
| Index Close | Cur Future | Change | |
|---|---|---|---|
| 15307.17 | 15148.0 | -172.00 |
| Fair Val Close | Cur Future | Change | |
|---|---|---|---|
| 15284.17 | 15148.0 | -136.17 |
Jim Rickards – Japan’s Taking The World Down With Them
Foreclosed Homeowners Arrested While Demanding Banker Prosecution- DHS, Cops make arrests
How ironic, arrests made on CONSTITUTION BLVD
Which Foreigners Got the FED $500,000,000,000? Bernanke: “I Don’t Know”
This is Congressman Alan Grayson questioning Federal Reserve Chairman Ben Bernanke on $550B of loans to foreigners (or ‘central liquidity swaps’ in Federal Reserve-ese’).
Which financial institutions received this money? Bernanke’s answer: I don’t know.
As the Fed was lending this money, the dollar increased by 30% in value. Grayson asks, was this a coincidence? Bernanke’s answer: yes.
Tim Geithner Refuses To Answer Brad Sherman On Some Questions
“Bernanke Threatens The Congress” We will cause an Economic Collapse
Bullion Rallies Despite “Losing US Fed Prop” as Stock Markets Sink on Weak China Data
London Gold Market Report
from Adrian Ash, BullionVault
Weds 22 May, 08:45 EST
Bullion Rallies Despite “Losing US Fed Prop” as Stock Markets Sink on Weak China Data
BOTH gold and silver rose in Asian and London trade Thursday morning, defying a sharp slide in global stock markets to gain 3.0% rally from yesterday’s sharp sell-off.
Commodity prices fell as major government bonds rose but weaker Eurozone debt slipped, pushing interest rates higher.
Tokyo’s Nikkei index – up by 85% from November – dumped more than 7% after new data showed a surprise contraction in China’s manufacturing sector.
Private “retail” investors have “abducted” the Japanese stock market, accounting for more than a third of recent volume, according to brokers quoted by the Financial Times.
“[Gold's] inability to hold the highs is bearish,” says the latest technical chart analysis from Scotia Mocatta.
“[Wednesday's] intra-day rally is indicative of bargain hunting in gold rather than a change in trend,” the bullion bank adds, pegging support at the April 2013 low of $1323.
Like Barclays Capital’s analysts, Scotia now puts short-term resistance at yesterday’s sudden spike of $1412.
Gold prices rose Thursday morning to breach $1390 per ounce once again, recovering two-thirds of Wednesday’s plunge from that 1-week high – made as US Federal Reserve chairman Ben Bernanke was testifying to the Senate on the likely direction of Dollar interest rates and quantitative easing.
Having warned against “a premature tightening of monetary policy” however, Bernanke was then asked if the Fed might start reducing its $85 billion in monthly QE purchases of government debt and mortgage bonds before Labor Day on Sept. 1st.
“I don’t know,” Bernanke replied.
Minutes from the US central bank’s latest policy meeting also showed one participant wanting to reduce the level of QE “immediately”.
“Not having the future support of the Fed,” says Edward Meir’s note for INTL FC Stone, “will remove a major prop for gold.”
“It seems the market is now squarely focusing on the September 17-18 [policy] meeting for the Fed to make its move,” reckons ING bank’s analysts.
“Together with expectations of tightening quantitative easing,” says Mitsubishi analyst Jonathan Butler – also quoted by Reuters – “the general trend for a modest economic recovery in the developed markets is going to fuel growth in the equity markets and the Dollar.
“That should see gold coming under pressure.”
“The momentum is strongly negative,” says Edward Lashinski, global strategist at RBC Capital Markets in Chicago.
“The market understands that gold is no longer a safe haven.”
On the supply side meantime, “Being more profitable is better than being bigger,” said Jamie Sokalsky, CEO of the world’s largest gold miner, Barrick, at Bloomberg’s Canada Economic Summit in Toronto on Tuesday.
Also forecasting new record highs for the gold price thanks to central-bank demand and the state of the global economy, Sokalsky mooted “divesting” some smaller, higher-cost mines to focus on more efficient projects.
In particular, the giant Pascua-Lama project in Chile – valued at some $8.5 billion, and already eating some $5bn in costs – has been delayed by environmental concerns, says Canada’s Financial Post.
“Barrick is considering all its options at Pascua-Lama,” says the paper, “including outright suspension.”
At current gold prices around 10% of gold mines globally will be making losses, according to Thomson Reuters GFMS data.
“We would initially expect the oldest mines closing,” says a special report from Japanese trading house Mitsui’s metals strategist David Jollie in London, “as they are in many cases coming to the end of their operating life.”
Gold mining companies are likely to avoid closing newer projects “as long as possible,” Jollie says. But if the gold price stays low enough long enough, “closures will happen.”
Adrian Ash
from Adrian Ash, BullionVault
Weds 22 May, 08:45 EST
Bullion Rallies Despite “Losing US Fed Prop” as Stock Markets Sink on Weak China Data
BOTH gold and silver rose in Asian and London trade Thursday morning, defying a sharp slide in global stock markets to gain 3.0% rally from yesterday’s sharp sell-off.
Commodity prices fell as major government bonds rose but weaker Eurozone debt slipped, pushing interest rates higher.
Tokyo’s Nikkei index – up by 85% from November – dumped more than 7% after new data showed a surprise contraction in China’s manufacturing sector.
Private “retail” investors have “abducted” the Japanese stock market, accounting for more than a third of recent volume, according to brokers quoted by the Financial Times.
“[Gold's] inability to hold the highs is bearish,” says the latest technical chart analysis from Scotia Mocatta.
“[Wednesday's] intra-day rally is indicative of bargain hunting in gold rather than a change in trend,” the bullion bank adds, pegging support at the April 2013 low of $1323.
Like Barclays Capital’s analysts, Scotia now puts short-term resistance at yesterday’s sudden spike of $1412.
Gold prices rose Thursday morning to breach $1390 per ounce once again, recovering two-thirds of Wednesday’s plunge from that 1-week high – made as US Federal Reserve chairman Ben Bernanke was testifying to the Senate on the likely direction of Dollar interest rates and quantitative easing.
Having warned against “a premature tightening of monetary policy” however, Bernanke was then asked if the Fed might start reducing its $85 billion in monthly QE purchases of government debt and mortgage bonds before Labor Day on Sept. 1st.
“I don’t know,” Bernanke replied.
Minutes from the US central bank’s latest policy meeting also showed one participant wanting to reduce the level of QE “immediately”.
“Not having the future support of the Fed,” says Edward Meir’s note for INTL FC Stone, “will remove a major prop for gold.”
“It seems the market is now squarely focusing on the September 17-18 [policy] meeting for the Fed to make its move,” reckons ING bank’s analysts.
“Together with expectations of tightening quantitative easing,” says Mitsubishi analyst Jonathan Butler – also quoted by Reuters – “the general trend for a modest economic recovery in the developed markets is going to fuel growth in the equity markets and the Dollar.
“That should see gold coming under pressure.”
“The momentum is strongly negative,” says Edward Lashinski, global strategist at RBC Capital Markets in Chicago.
“The market understands that gold is no longer a safe haven.”
On the supply side meantime, “Being more profitable is better than being bigger,” said Jamie Sokalsky, CEO of the world’s largest gold miner, Barrick, at Bloomberg’s Canada Economic Summit in Toronto on Tuesday.
Also forecasting new record highs for the gold price thanks to central-bank demand and the state of the global economy, Sokalsky mooted “divesting” some smaller, higher-cost mines to focus on more efficient projects.
In particular, the giant Pascua-Lama project in Chile – valued at some $8.5 billion, and already eating some $5bn in costs – has been delayed by environmental concerns, says Canada’s Financial Post.
“Barrick is considering all its options at Pascua-Lama,” says the paper, “including outright suspension.”
At current gold prices around 10% of gold mines globally will be making losses, according to Thomson Reuters GFMS data.
“We would initially expect the oldest mines closing,” says a special report from Japanese trading house Mitsui’s metals strategist David Jollie in London, “as they are in many cases coming to the end of their operating life.”
Gold mining companies are likely to avoid closing newer projects “as long as possible,” Jollie says. But if the gold price stays low enough long enough, “closures will happen.”
Adrian Ash
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